Much has been written over the years about a “cashless society” where no physical money trades hands, and all purchases and payments are done via debit and credit cards and payment apps on smartphones. Even bitcoins (which I have no idea how they work) are gaining favor, with the major financial institution Goldman Sachs announcing it will start investing in digital currencies.
Many countries are seeing noncash transactions account for 80 to 90 percent of all activity. Canada is in the 90 percent range, while the United States is around 80 percent. The arguments in favor of this approach cite the usual arguments that removing cash (or limiting high-denomination bills) will stem illegal activities such as drug dealing and tax evasion. In my mind the jury is still out on that argument, since drug dealers would just switch to bitcoins, which are untraceable.
While I don’t feel the United States could ever go totally cashless, after what happened during the last several months with hurricanes and the loss of electricity in Houston, Florida, Puerto Rico and the Caribbean, the question is, without electricity, how do people get money or make purchases?
In a situation where there is no electricity, none of these cashless options work. Even if one is near a bank, without electricity the bank probably wouldn’t open, and even if it did it would have no way to access an account. And the power outage doesn’t have to be wide spread. Even an outage on Brigantine could be a hardship for people who rely totally on credit cards. Even with power restored locally, there is always to chance that the financial institution holding your account could be experiencing its own problems and would not be accessible to process a transaction.
So, plan for the worst and hope for the best (I’ve said this before). Even if you rely on credit or debit cards or other electronic means of purchasing, always have a small amount of cash on hand for emergencies, the amount dependent on the value of what you may need to purchase (food, water, gas) and how long you may expect to deal with a power outage. My personal feeling is that about one week would be enough using Sandy as a guide. And have money available in small-denomination bills ($1, $5 and $10) since in many cases the store you will deal with won’t have change. Don’t walk into the Acme and try to purchase a loaf of bread and a quart of milk and hand the cashier a $100 bill. He or she may not have change.
Puerto Rico is probably the worst-case scenario, with estimates of four to six months for much (not all) of electricity to be restored. While the emphasis is to get power on and food into stores as quickly as possible, the store owners are going to need to be paid so they will have the means to replace stock.
Is there any likelihood we could experience a disaster to the degree of what happened in the Caribbean with extended power outages similar to what they are experiencing? It’s not likely, but possible, either natural or manmade.
Douglas Keefe is the president of Beachcomber Coins Inc. He and his wife, Linda, operate Beachcomber Coins and Collectibles, formerly in the Shore Mall and now at 6692 Black Horse Pike in the old Wawa building just beyond the former Cardiff Circle. They have satellite offices in Brigantine and Absecon. Between them they have more than 70 years of experience in the coin and precious metals business. They are members of the American Numismatic Association, the Industry Council of Tangible Assets, the Numismatic Guarantee Corp., the Certified Coin Exchange and the Professional Coin Grading Service.